Samsung Electronics considers splitting firm in two

Samsung Electronics considers splitting firm in two

Samsung logo

Samsung Electronics has confirmed it is considering dividing the company into two separate firms, BBC says.


The company has been under pressure from some investors to break itself into a holding unit and an operating company to boost shareholder value.


The South Korean technology giant also announced plans to increase dividends and said it would continue to buy back more shares.


Restructuring pressure had been mounting after the Note 7 fiasco.


In October, the company was forced to stop production of its flagship smartphone model after failing to resolve battery problems leading to overheating and the devices catching fire.


Samsung said it would bring in "external advisers to conduct a thorough review of the optimal corporate structure."


The firm pointed out that "the review does not indicate the management or the board's intention one way or another."


Samsung also said it would pay out half of its free cash flow to shareholders for 2016 and 2017 and raise the dividend for 2016 by 36% compared to the previous year.


In order to improve governance, the firm said it would nominate at least "one new, international, independent board member" as well as create a separate governance committee.


The company's statement comes after US activist hedge fund Elliott Management called for the firm to split into a holding unit for ownership purposes and a separate operating company.